US 50% Tariffs Threaten India’s Emerging Tech Sector
US President Donald Trump has ordered a steep increase in tariffs on Indian imports, raising duties to 50% from August 27 and planning a 100% tariff on semiconductors and chips not made in the US. This move, in retaliation for India’s continued purchase of Russian oil, marks the highest duty rate among major Asian partners and signals a shift toward protectionism.
Industry experts warn the tariffs will drive up costs for hardware startups, data centers, AI and IoT firms, and semiconductor manufacturers dependent on US-made components and cloud services. Rising import prices and supply chain disruptions may squeeze profit margins, delay scaling plans, and erode investor confidence in India’s tech and Web3 ecosystems.
The tariffs also cast doubt over the US-India TRUST initiative, which aims to foster collaboration in AI, semiconductors, quantum computing and other emerging technologies. Companies are now urged to diversify markets, boost automation, and reassess funding strategies amid heightened policy uncertainty, potentially stalling long-term innovation and private investment.
Bearish
The imposition of steep US tariffs on Indian imports and semiconductors raises input costs and policy risk for tech and Web3 firms. Similar to past US-China trade tensions, this move may trigger short-term sell-offs and heightened volatility in technology-linked tokens. Over the long term, investors are likely to adopt a cautious stance, delaying funding and slowing infrastructure development. The resulting uncertainty around supply chains and regulatory stability is expected to weigh on market sentiment, making a bearish outlook appropriate.